FT: Pearson to announce £400m sale of 50 per cent stake in Economist 'as early as this week'

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Pearson is expected to announce the sale of its 50 per cent stake in The Economist “as early as this week” for around £400m, according to the Financial Times. (Picture: Shutterstock)

The newspaper, whose £844m sale from Pearson to Nikkei was announced last month, reports “people close to the matter” as saying that the De Rothschild family and Exor are likely to emerge as the largest single shareholders in the Economist Group.

Lynn Forester de Rothschild and her husband Sir Evelyn currently control around 21 per cent of the group, while Exor owns 4.7 per cent and has previously said it wants to increase its stake but not seek a majority, according to the newspaper.

The FT quotes two people close to the situation as saying that Pearson – which is seeking to focus on education rather than media – held unsuccessful talks with Hearst Corporation about a sale. The FT said: “It is not clear why those negotiations broke down.”

The four trustees of The Economist would need to approve the sale of Pearson’s stake. Their role is to protect the independence of the magazine.

Pearson confirmed it was “in discussions” about selling its share in The Economist shortly after the FT sale was confirmed. It said: “There is no certainty that this process will lead to a transaction. We will make further announcements if and when appropriate.”

The Economist Group, like the Financial Times Group, is part of Pearson’s Professional division. Last month, Pearson’s half-year results showed that the Professional division recorded an adjusted operating profit of £38m for the six months, up year-on-year from £29m. Its turnover was £553m, up from £519m.

According to the results, the Economist Group made an increased contribution "as growth in circulation, custom research and marketing services revenues offset declines in print advertising".

The magazine's global circulation remained at 1.6m, according to Pearson, level with the last two years. The publisher said that the Economist saw a 57 per cent increase in "subscribers choosing digital packages".

Pearson also revealed that the magazine's Espresso app, launched at the end of 2014, has been downloaded more than 800,000 times. In April, the group launched the Economist Global Business Review, an English-Chinese smartphone app. Pearson said this was its first bilingual product.

The UK edition of The Economist recorded an average weekly circulation of 223,915 in the second half of 2014, according to ABC, up 1.3 per cent. Nearly a quarter of this circulation is made up of free bulk copies.

The FT has owned half of The Economist since 1928. And Pearson has owned the FT since 1957.